Computer-assisted audit techniques involve using a computer to complete a few tasks when reviewing a client’s financial information. A few popular tools or techniques a computer offers include filter criteria, statistical analysis, aging, and trend analysis. Using a computer during the audit allows multiple individuals access to a client’s information. Professionals use computer-assisted audit techniques to work through larger amounts of financial data quicker than traditional manual reviews or tasks regarding information.
Filter criteria are computer-assisted audit techniques that take large groups of information and data and reduce them to a few samples. Sampling allows auditors to take a small yet representative group of information to test a company’s entire accounting process. Errors in a client’s accounting or financial information can also be discovered with filter criteria. For example, auditors can filter journal entry transactions for a certain date period or dollar amount. This limits the amount of searching necessary to find needed information.
Statistical analyses include ratios and other mathematical measures. Computer-assisted audit techniques often use spreadsheets as a part of this analysis. Auditors can input data into certain spreadsheet cells and allow formulas inherent in the spreadsheet to do their work. Using this technique, accountants can manually input data into spreadsheets or upload it into the spreadsheet electronically. Large amounts of accounting and financial information can go through this process quickly with computer-assisted audit techniques.
Aging is a particular accounting method often found in accounts receivable or accounts payable departments. Auditors create reports to determine the age for certain pieces of accounting or financial information. For example, auditors group open receivables or payables into 30, 60, 90, or 120 days of age. The reports produced under computer-assisted computer techniques allow auditors to determine how well the company pays its bills and tracks open accounts with customers or vendors, respectively. Accounting software programs typically have this report built into the system for use by auditors and accountants.
Trend analysis is a very common tool in both accounting and auditing environments. Accountants and auditors compare current financial information or data to a previous period and compute the change between the two figures, often months or years apart. Significant growth or decline in the figures can lead to a deeper investigation as the change may be related to potentially inappropriate reasons. Computer-assisted audit techniques often use this tool as a baseline for audit reviews. Once auditors establish a historical baseline for a company’s growth or decline for accounting information, current figures must be comparable to this number.